Economic recap
Figures released in March saw the New Zealand economy gross domestic product (GDP) fall 0.6% in the last three months of 2022, after a 1.7% rise in the September 2022 quarter. The drop at the close of the year was larger than predicted by many of New Zealand banks and a number of economists. Annually, GDP is up 2.4% year on year, unemployment remains low, at 3.3%.
Two large banks in the United States with significant exposure to the technology sector failed, while another entered liquidation under financial distress. These banks were Silvergate Bank, Silicon Valley Bank, and Signature Bank. Outside the United States, Credit Suisse joined the above 3 banks finding themselves in difficulty, the difference here being over the last few years Credit Suisse has been in and out of the news with a number of issues and negative media attention.
From a housing perspective the downward trend continues with both monthly sales figures and year to date sale figures at their lowest in 40 years dating back to figures last seen in the 1980’s.
Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations
March’s company insolvency figures were at the time of writing slightly above those of the past three years, as we move through April final March appointments will be advertised and widen the gap over the last three years, whether March can reach the 2019 levels will show in our April Newsletter. The breakdown in the types of appointments came back in line with normal monthly figures with shareholder appointments making up 80 of the 178 appointments, there was a significant bump in receivership with 27 for the month well above the monthly average of 7, this was largely due to a group of companies (20) being placed unto receivership at one time. Court appointments also remained high but not at their February levels bringing in 45 for the month.
Historically solvent appointments have seen a jump in March at the financial year end, this level while slightly elevated in March 2023 at 23 was below the past two years where solvent appointments were in the mid to high 30’s.
It will be of interest whether the normal drop seen in April follows past years, this is normally the result of appointments pushed through to get into the end of financial year and a number of public holidays in April resulting in less working days, this negatively affects appointments for the month.
Winding Up Applications
March 2023 applications while below 2021 figures are above 2022. Once again, the corporate winding up applications portion of total applications have remained above the IRD share of the applications. As outlined last month IRD often takes a few months to hit their stride in issuing winding up applications. As seen in the below graph from May/June onwards we should see an increase in IRD application, whether this plays out in an election year is yet to be seen.
Personal Insolvencies – Bankruptcy, No Asset Procedure and Debt Repayment Orders.
Personal insolvency stats remain low, if slightly above January’s figures. Of the 106 total, 50 were from bankruptcies, 49 from No Asset Procedures and the remainder from Debt Repayment Orders. This breakdown is roughly in line with past months, Bankruptcies and No Asset Procedures remain at similar numbers with Debt Repayment Orders 10% of the total.
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